"Our mission is to help fund accountants better understand the private equity industry in order to work in a seamless manner with GPs and LPs and consistently exceed their expectations"
PE Accounting Insights

The Definitive Course on Private Equity Accounting - Full Version 5-day Course

Private Equity Accounting - Full Version Course 5-day

Course Date & Time

  • Mon, 16/01/2012 - 09:00
  • Fri, 20/01/2012 - 17:00
  • 5 days
  • 9AM-5PM

Who should attend?

  • Junior Fund Accountant
  • Intermediate Level Fund Accountant
  • Senior Fund Accountant
  • Senior Private Equity Professional - Accounting Background

Choose Your Module:

The Definitive Course on Private Equity Accounting - a 5-day full version

This is the preferred all-encompassing version of the Private Equity Accounting training course that provides you with an all-round very detailed knowledge of all the aspects of PE accounting. This version also provides you with an opportunity to test your newly acquired knowledge and skills by working on a case study at the end of each module and discuss it not only with your trainer, but also exchange ideas and benchmark the practices in your firm against the practices in other private equity firms and fund administrators.

In addition to all that you will get from the shorter version, in this full version, you will also benefit from the following:

  • A FREE copy of Private Equity Accounting Book by Mariya Stefanova, with a value of £350 (if you attend all modules).
  • A certificate for the completion of the course
  • Much more detailed explanation on each subject with a journal-by-journal example and the impact on the financial statements (where applicable)
  • You will complete a practical exercise/case study at the end of each module to apply and self-test your knowledge

We usually run that course in 5 consecutive days from Monday to Friday and you can either take all modules (a discount scheme provided), or you can mix and match different modules that you can selectively attend depending on your specific needs.

Breakfast, lunch and coffees & teas are included.

For the short less detailed version of the course refer to Crash Course on Private Equity Accounting - a 2-day short version.

 

Speaker

Mariya Stefanova

Mariya Stefanova has extensive experience in the specialist field of private equity accounting and in her capacity as a senior trainer she has trained over 150 fund accountants. Mariya’s professional experience spans roles at Augentius Fund Administration, Mourant International Finance Administration (now State Street), French investment bank Calyon and private equity real estate manager Patron Capital Partners.

Course Date: 16 Jan 2012 - 09:00

From date: Mon, 16/01/2012 - 09:00 To date: Mon, 16/01/2012 - 09:00 Course Duration: 5 days Course Time: 9AM-5PM

Course Date: 19 Mar 2012 - 09:00

From date: Mon, 19/03/2012 - 09:00 To date: Mon, 19/03/2012 - 09:00 Course Duration: 5 days Course Time: 9AM-5PM

Course Date: 19 May 2012 - 09:00

From date: Sat, 19/05/2012 - 09:00 To date: Sat, 19/05/2012 - 09:00 Course Duration: 5 days Course Time: 9AM-5PM

Course Benefits

The course is suitable for:

  • Fund controllers and fund financial controllers working for PE houses
  • Senior fund accountants and team leaders working for PE houses and fund administrators
  • Fund accountants working for PE houses and fund administrators
  • Junior/part qualified fund accountants
  • Accountants from a non-private equity and/or non-financial services background looking to find jobs in private equity
  • “Introduction to PE” is also suitable for fund administrators (if the function is separate from fund accountants)
  • “Introduction to PE” is also suitable for non-accountants 

One-Off Technical Queries

Private Equity Accounting Course - Full Version (in five days from Monday to Friday)
Options N of Modules Standard Price Discounted Price if booked after .... Discount% Saving Discounted Price if booked before .... Total Savings
Book a Single Module (1/2 day or 3 1/2 h) 1 £ 489.89 £ 489.89 0% £ 0 £ 440.90 £ -48.99
Book 2 Modules
(any combination)
2 £ 979.78 £ 930.79 -5% £ -48.99 £ 837.71 £ -142.07
Book 3 Modules
(any combination)
3 £ 1,469.67 £ 1,359.44 -7.50% £ -110.23 £ 1,223.50 £ -246.17
Book 4 Modules
(any combination)
4 £ 1,959.56 £ 1,763.60 -10% £ -195.96 £ 1,928.94 £ -372.32
Book 5 Modules
(any combination)
4 £ 2,449.45 £ 2,143.27 -12.50% £ -306.18 £ 2,248.60 £ -520.51
Book 6 Modules
(any combination)
6 £ 2,939.34 £ 2,498.44 -15% £ -440.90 £ 2,546.20 £ -690.74
Book 7 Modules
(any combination)
7 £ 3,429.23 £ 2,829.11 -17.50% £ -600.12 £ 2,821.77 £ -883.03
Book 8 Modules
(any combination)
8 £ 3,919.12 £ 3,135.30 -20% £ -783.82 £ 3,075.28 £ -1,097.35
Book 9 Modules
(any combination)
9 £ 4,409.01 £ 3,416.98 -22.50% £ -992.03 £ 3,306.76 £ -1,333.73
Book 10 Modules
(any combination)
10 £ 4,898.90 £ 3,674.18 -25% £ -1,224.73 £ 3,306.76 £ -1,592.14

Early booking discount - Register by ....a further discount of 10% would be provided.

Module 1. Introduction to Private Equity for Accountants

The “Introduction to Private Equity for Accountants” is a must-do module. It would help not only fund accountants, but also administrators, non-accounting and non-financial staff build a solid foundation and will give you useful insights into the asset class that will help you better understand the mechanics of a private equity fund. Understanding how private equity works is vital to fund accountants in order to be able to reflect the fund transactions accurately. The course focuses only on relevant information and will also take you briefly through the fund lifecycle and all the accounting processes that would be discussed in detail in the other dedicated modules.

Topics to be discussed in this module:

  • What is private equity?
  • PE as part of the alternative asset class
  • Open-ended versus closed-ended investment schemes
  • Limited-life versus evergreen funds
  • Limited partnership as a preferred legal form for PE funds
  • Regulation in PE
  • Liquidity
  • J-curve
  • PE fund mechanics – how a PE fund works
  • PE fund lifecycle and accounting processes
  • Why PE accounting is different?
  • Value creation and PE

Module 2. Private Equity Structures and Types of Funds; Reading and Interpreting LPAs

This module will continue building upon the solid foundation that you have laid at the “Introduction to Private Equity for Accountants” module and that is so vital for fund accountants in order to reflect the fund transactions accurately.  After you have been introduced to the asset class, learnt about the mechanics of a PE fund and the accounting processes involved, you will  expand your knowledge on the main PE structures used in the UK and compare them to fund structures from other jurisdictions (eg. US, Luxembourg, other off-shore jurisdicitons, etc.) and the considerations driving those structures. You will also learn about the different sub-classes and types of funds (eg. property/real estate, infrastructure, fund-of-funds, mezzanine, etc.) And finally, you will dive into the main fund document that a fund accountant needs to know inside out and have a good understanding of – that is the Limited Partnership Agreement (the “LPA”) and we shall try to read and interpret the main terms of the LPA relevant to fund accountants.

Topics to be discussed in this module:

  • Private equity legal fund structures
  • Legal form and choice of jurisdiction
  • Examples of fund structures – UK versus US structures
  • Some important similarities and differences in the limited partnership agreement terms of the UK and US funds
  • Types of private equity funds
  • The limited partnership agreement (LPA)
  • The LPA structure, including its important clauses
  • Where to look in the LPA
  • Accounting and reporting implications

Module 3. Drawdowns

This module discusses in detail the drawdown process run in a typical private equity fund organised as a limited partnership. It takes you through the whole process, from explaining the rules stipulated in a typical LPA, through a sample step-by-step process map and the content of a drawdown notice, to the calculation, accounting implications with the journal postings, the most common allocation rules and the impact on the financial statements. In addition, subjects such as the treatment of partners’ capital under various accounting frameworks and recallable/redrawable amounts are also discussed. The module will also provide you with a practical example of a drawdown calculation, some suggested journal postings and an illustration of the impact of those journal postings on the financial statements and other reports (e.g. capital account).

For the full version of the course, there would be some case studies for the delegates to work on, in order to give them the opportunity to apply their newly acquired skills and then discuss the results not only with the trainer, but also with other delegates.

The module is very interactive and the trainer will encourage a dialogue and exchange of ideas and experience about different practices existing within the industry between the delegates and the trainer.

This module should ideally be taken with the “Closing Processes, Equalisation & Rebalancing” and the “Distributions” modules, but could also be taken on its own.

Topics to be discussed in this module:

  • What is a drawdown/capital call – the drawdown process explained
  • Where are the drawdown rules stipulated – a quick look at the relevant LPA clauses
  • Content of the drawdown notice
  • ILPA Private Equity Principles Version 2.0 and standardised reporting templates
  • What happens in terms of processes
  • Capital and loan contributions in a UK partnership and how it compares to a US partnership
  • Treatment of partners’ capital under IFRS, UK GAAP and US GAAP – equity vs. liability
  • Drawdown date
  • Recallable/redrawable amounts
  • Drawdown calculation
  • Most common allocations for drawdowns
  • Net drawdowns
  • Accounting implications and the impact on financial statements

Module 4. Closing Processes (Initial, Subsequent and Final Closings), Equalisation and Rebalancing

This module discusses in detail the closing processes in a typical private equity fund organised as a limited partnership. It takes you through all the processes from the initial/first closing, through the subsequent/additional closings, to the final closing and explains the implications for all participant – new investors, old investor, the fund, the GP and the fund accountants and/or administrators (or fund administrators where present). It will also provide you with practical examples of equalisation and rebalancing calculations, some suggested journal postings and an illustration of the impact of those journal postings on the financial statements and other reports at the investor level.

For the full version of the course, there would be some case studies for the delegates to work on, in order to give them the opportunity to apply their newly acquired skills and then discuss the results not only with the trainer, but also with other delegates.

The module is very interactive and the trainer will encourage a dialogue and exchange of ideas and experience about different practices existing within the industry between the delegates and the trainer.

This module should ideally be taken with the “Drawdowns” (strongly recommended), “Distributions” and “Partner Transfers” modules, but could also be taken on its own.

Topics to be discussed in this module:

  • What is a closing/close - the closing process explained
  • Initial, subsequent and final closings
  • Implications for new investors, old investors and accountants/administrators of having multiple closings
  • Documents required
  • Equalisation and rebalancing – differentiating between the two processes
  • Equalisation process – why, when and how to run an equalisation process?
  • Equalisation calculation
  • Accounting for equalisation
  • Rebalancing process – why, when and how to run a rebalancing process?
  • Accounting for rebalancing
  • Automated rebalancing processes – some tips about what could go wrong

Module 5. Partner Transfers

This module discusses in detail the partner transfer process in a typical private equity fund organised as a limited partnership. It takes you through the whole process from explaining the nature of the partner transfer, through the vital documents for the fund accountant/administrator to record the transaction accurately, to the implications for all participant – transferor, transferee, the fund and the fund accountants and/or administrators (or fund administrators where present). It will also provide you with a simple practical example of a partner transfer and an illustration of the impact on the financial statements and other reports at the investor level.

For the full version of the course, there would be some case studies for the delegates to work on, in order to give them the opportunity to apply their newly acquired skills and then discuss the results not only with the trainer, but also with other delegates.

The module is very interactive and the trainer will encourage a dialogue and exchange of ideas and experience about different practices existing within the industry between the delegates and the trainer.

This module should ideally be taken with the “Drawdowns”, “Distributions” and “Closing Processes, Equalisation & Rebalancing” modules, but could also be taken on its own.

Topics to be discussed in this module:

  • What is a partner transfer - the partner transfer process explained
  • Vital documents for fund accountants to record partner transfer transactions properly
  • Accounting implications and impact on financial statements
  • Partner transfers in specialist private equity accounting systems
  • Some complications and possible reasons

Module 6. Distributions

This module discusses in detail the distribution process run in a typical private equity fund organised as a limited partnership. It takes you through the whole process from explaining what a distribution is and what are the different types of distribution, the rules stipulated in a typical LPA, through a sample step-by-step process and the content of a distribution notice, to the calculation, accounting implications with the journal postings, the most common allocation rules and the impact on the financial statements. In addition, subjects such as recycling of distributions (recallable/redrawable distributions), distributions in species, some carried interest and clawback implications and the FoF perspective are also discussed. The module will also provide you with a practical example of a distribution calculation, some suggested journal postings and an illustration of the impact of those journal postings on the financial statements and other reports (e.g. capital account).

For the full version of the course, there would be some case studies for the delegates to work on, in order to give them the opportunity to apply their newly acquired skills and then discuss the results not only with the trainer, but also with other delegates.

The module is very interactive and the trainer will encourage a dialogue and exchange of ideas and experience about different practices existing within the industry between the delegates and the trainer.

This module should ideally be taken with the “Drawdowns” (strongly recommended), “Closing Processes, Equalisation & Rebalancing” and the “Partner Transfers” modules, but could also be taken on its own.

Topics to be discussed in this module:

  • What is a distribution - the closing process explained
  • Where are the distribution rules stipulated – a quick look at the relevant LPA clauses
  • What are the different types of distributions
  • Timing of the distributions and distribution date
  • Limitations on distributions
  • Distribution notices and content of distribution notices
  • ILPA Private Equity Principles Version 2.0 and standardised reporting templates
  • Application of cash
  • Distribution calculation (calculation of each partner’s share of the distribution)
  • Most common allocations for drawdowns
  • Net (simultaneous) distributions
  • Accounting implications and impact on the financial statements
  • The fund of funds perspective on distributions
  • Distributions in specie
  • Distribution processes
  • Final verification of distributions and checking for carried interest clawbacks
  • Reinvestment (recycling) of distributions – temporary/redrawable and permanent distributions

Module 7. Investments, PE Investment Valuations & Investment Revaluations

This module focuses in detail on one of the most important areas for private equity funds and generally for investment entities – investments, investment valuations and investment revaluations. It takes you through the whole theoretical model from the fair value concept versus the historical cost, through PE investment valuations and the valuation process – generally an obscure area for fund administrators and other non-in-house fund accountants, to accounting for and presentation of investments in the financial statements with a journal-by-journal explanation and an illustration of the impact on the financial statements under the main accounting frameworks (IFRS, UK GAAP and US GAAP). In addition, some hot topics and new development such as IFRS 9 and its deferral and future application, as well as IFRS 13 Fair Value Measurement and the potential future consolidation exemption (Exposure Draft ED/2011/4) for investment entities, are also discussed. The module will also provide you with a practical example of the investment process from the acquisition, through the revaluation, to the disposal with some suggested journal postings and an illustration of the impact of those journal postings on the financial statements and other reports (e.g. investment schedules).

For the full version of the course, there would be some case studies for the delegates to work on, in order to give them the opportunity to apply their newly acquired skills and then discuss the results not only with the trainer, but also with other delegates.

The module is very interactive and the trainer will encourage a dialogue and exchange of ideas and experience about different practices existing within the industry between the delegates and the trainer.

This module is relatively independent of the other modules and could be taken on its own.

Topics to be discussed in this module:

  • Basis of measurement for investments – historical cost versus fair value
  • What is a fair value? IFRS 13 Fair Value Measurement and FASB ASC 820 Fair Value Measurement
  • Private equity investment valuations and how the valuation process works – a brief explanation for fund accountants
  • Investments, investment revaluations and presentation of investments in financial statements under IFRS - investments classification and accounting for investments and investment revaluations under IFRS (IAS 39)
  • Investments, investment revaluations and presentation of investments in financial statements under UK GAAP
  • Investments, investment revaluation and presentation of investments in financial statements under US GAAP – a brief comparison between IFRS and US GAAP
  • Where we stand under IFRS with regards to IFRS 9 and IAS 39. IFRS 9 – why change, how is it different from IAS 39 and when?
  • Consolidation Exemption – US GAAP and IFSB’s Exposure Draft  ED/2011/4 Investment Entities – a brief overview in the context of fair value of investments
  • Additional information about investments provided in the quarterly investor reports – ILPA Quarterly Reporting Standard Template & Best Practices

Module 8. Performance Measurement – IRRs and other performance metrics in private equity

This module focuses on a subject that is extremely important, but is not purely accounting, as the performance metrics are not typically presented in the financial statements (apart from in the Highlights note in financial statements prepared under US GAAP), instead they are reported in the quarterly investor reports and usually fund accountants calculate them. Unfortunately, very often their nature is not well understood and instead they are only mechanically calculated without a reasonable understanding. Interpretation is even more challenging.

This module will help you with some theoretical knowledge, as well as with practical tips to better understand the nature of the IRRs and other performance metrics, their specifics and limitations which will lead to less errors and time spent to work out why sometimes your formula in Excel does not work and you will make a better sense of them. It will also help you differentiate between Net and Gross IRRs and what cash flows you should use to calculate each of them. It takes you through the whole theoretical model, starting with an explanation of the general mathematical concept, important features, advantages and limitations of the IRRs, through the step-by-step algorithm of the manual calculation and an automated calculation by using a computer (Excel), to the specific application as a performance metric in private equity and the different levels/types of IRRs as advocated by EVCA and BVCA. The module will also provide you with a case study, including calculation of Net and Gross IRRs. In addition, it will discuss some other performance metrics, such as some multiples (PIC, DPI, RVPI and TPVI) and the interpretation of both IRRs and multiples.

For the full version of the course, there would be some case studies for the delegates to work on, in order to give them the opportunity to apply their newly acquired skills and then discuss the results not only with the trainer, but also with other delegates.

The module is very interactive and the trainer will encourage a dialogue and exchange of ideas and experience about different practices existing within the industry between the delegates and the trainer.

This module is relatively independent of the other modules and could be taken on its own.

Topics to be discussed in this module:

  • Definition and mathematical nature of the Internal Rate of Return (IRR)
  • Why the IRR is a preferred performance metric in private equity
  • Manual calculation of IRRs – anatomy of the algorithm of calculating IRRs
  • What do we need to calculate an IRR?
  • Calculating IRRs with a computer (in Excel)
  • Some important features and limitation of the IRR
  • Levels/Types of IRRs advocated by the EVCA & BVCA
  • Net IRRs/Investor IRRs
  • Gross IRRs/Investment IRRs
  • Use and interpretation of the IRRs
  • Are the IRRs the Holy Grail of PE performance measurement?
  • Other performance metrics in private equity
  • Some multiples – PIC, DPI, RVPI and TVPI
     

Module 9. Management Fee versus Priority Profit Share (PPS)

This module focuses on a subject with mixed practices of accounting that is not always well understood. The lack of written information on the subject and the secrecy of the PE industry make the fund accountant’s task even harder. Some fund accountants still account for PPS (also referred to as “GPS”, “GPPS” and “MPS”) as an expense, similar to management fee, but is that the correct treatment, after all why would lawyers structure and call it differently if it is the same thing as management fee?

To find out about all that, join PEAI “Management Fee versus Priority Profit Share (PPS)” module. It will take you through all that you need to know about management fee and PPS and how they are different, what are the advantages of PPS over management fee and what is the accounting treatment that follows the legal treatment for each of them. You will learn about some wrinkles of the management fee/PPS calculation, including the management fee rebates/reductions, and in the full version of the course you will achieve that in a very interactive way by reading through and discussing the relevant clauses of a typical LPA and working through a case study. Then we will discuss the mixed practices in accounting for PPS with a journal-by-journal exercise demonstrating at the same time the impact of each journal entry on the financial statements.

For the full version of the course, there would be some case studies for the delegates to work on, in order to give them the opportunity to apply their newly acquired skills and then discuss the results not only with the trainer, but also with other delegates.

The module is very interactive and the trainer will encourage a dialogue and exchange of ideas and experience about different practices existing within the industry between the delegates and the trainer.

This module is relatively independent of the other modules and could be taken on its own.

Topics to be discussed in this module:

  • What is a management fee
  • Why management fee in the UK is typically structured as PPS/GPS/GPPS/MPS
  • Advantages of PPS over management fee
  • Some wrinkles in the calculation of management fee/PPS
  • Accounting for management fee
  • Accounting practices for PPS
  • Impact and presentation of PPS in the financial statement of a PE fund

Module 10. Carried Interest

This module focuses on one of the most complex areas in private equity accounting. Many fund accountants still lack the experience, as the industry is relatively new and for many of the not-so-mature funds with whole-of-fund carry arrangements the carried interest has not yet kicked in. The lack of written information on the subject and the secrecy of the PE industry make the fund accountant’s task even harder. Carried interest modelling and accounting though need to be planned way before it starts kicking in.

To find out all that a fund accountant needs to know about carried interest in order to be able to model and account for it, join PEAI “Management Fee versus Priority Profit Share (PPS)” module. It will take you through all that you need to know about carried interest, from the different types of carried interest scheme popular nowadays in Europe and US, the mechanics of their waterfall calculation, carried interest modelling, when and how to start accounting for carry and how to present it in the financial statements. In addition to that, some tax aspects of carried interest in the UK and US, including base cost shift (BCS) in the UK are also briefly covered in that module

For the full version of the course, there would be some case studies for the delegates to work on, in order to give them the opportunity to apply their newly acquired skills and then discuss the results not only with the trainer, but also with other delegates.

The module is very interactive and the trainer will encourage a dialogue and exchange of ideas and experience about different practices existing within the industry between the delegates and the trainer.

This module is relatively independent of the other modules and could be taken on its own.

Topics to be discussed in this module:

  • What is carried interest – substance and legal form
  • Different types of carried interest schemes – whole-of-fund, pure deal-by-deal and hybrid models (partial deal-by-deal, take-as-you-go, etc.)
  • Mechanics of the waterfall calculation
  • Some tax aspects in the UK and US
  • Base cost shift (BCS) - brief explanation of the concept
  • Carried interest calculation
  • Clawback provisions
  • Accounting treatment at the fund level and presentation in the fund financial statements of carried interest under various recognised accounting frameworks (IFRS, UK GAAP and US GAAP)
  • ·    A few tips on carried interest modelling